Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Wednesday, February 26, 2003

Changing Patterns in IT Outsourcing

This decision by Ford looks interesting, and significant in its implications if the trend continues.

Ford Motor Company said on Tuesday said it would cut its information technology budget by 20 per cent, or $300m, in a further sign of the company's efforts to accelerate its sweeping restructuring. The move is part of a shift away from contract workers and echoes a broader swing in the balance of power in the IT employment market. At the height of the technology boom, with workers in short supply, IT experts were able to dictate the terms of higher-paying contract work rather than accept positions as salaried employees. Power has since shifted back to employers. To attack their overall staff costs, many big companies have opted to outsource large parts of their technology operations completely, shifting staff en masse to companies like IBM and EDS. Such exercises are normally estimated to produce savings of around 15 per cent. Visteon, Ford's largest parts supplier, last week announced a 10-year agreement in which Visteon will pay IBM $2bn over 10 years to handle its IT requirements. Ford said that as a result of its move, some of its current 2,800 contract IT jobs would be cut. Some of the workers are employed by IBM and Compuware, a large Michigan based IT company.
Source: Financial Times
LINK

Eastern Europe Economy Watch

United States

Edward's Website

About

Edward 'the bonobo' is a Catalan economist of British extraction based in Barcelona. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

He is currently working on a book with the provisional working title "Population, the Ultimate Non-renewable Resource".

Apart from his participation in A Fistful of Euros, Edward also writes regularly for the demography blog Demography Matters. He also contributes to the Indian Economy blog . His personal weblog is Bonobo Land . Edward's website can be found at EdwardHugh.net.